Income Tax Chart for 2017-18

Government to reduce time for revising income tax return to 12 months

Finance Minister Arun Jaitley today proposed to reduce the time period for revising a tax return to 12 months from completion of financial year. 

The Minister also proposed to reduce the time for completion of scrutiny of assessments from 21 months to 18 months for Assessment Year 2018-19 and further to 12 months for Assessment Year 2019-20 and thereafter. 

"Time period for revising a tax return is being reduced to 12 months from completion of financial year, at par with the time period for filing of return," according to Union Budget 2017-18 presented by Finance Minister Arun Jaitley in Parliament. 

In order to expand tax net, the Centre plans to have a simple one-page form to be filed as Income Tax Return for the category of individuals having taxable income up to Rs 5 lakh other than business income. 

Also a person of this category who files income tax return for the first time would not be subjected to any scrutiny in the first year unless there is specific information available with the Department regarding his high value transaction. 

Source:-The Economic Times

Tax rate for lowest income slab slashed to 5% from 10%, surcharge of 10% slapped on incomes over Rs 50 lakh

The finance minister has proposed to slash the tax rate for individuals in the lowest income tax slab – Rs 2.5 lakh to Rs 5 lakh –to 5% instead of 10%. The existing rebate under Section 87A (currently given to people with income up to Rs 5 lakh) is proposed to be reduced to Rs 2500 from the existing Rs 5000 for individuals earning between Rs 2.5 lakh to Rs 3.5 lakh. 

As a result of the combined effect of the new Section 87A rebate and the reduction in the lowest slab tax rate to 5% the tax burden for those with income upto Rs 3 lakh would be zero and tax burden those in the Rs 3 lakh to Rs 3.5 lakh bracket would be Rs 2500. 

Those earning Rs 4.5 lakh can therefore reduce their tax liability to zero by fully utilising the tax break under Section 80C combined with these new proposals. 

Those falling in the higher income tax slabs will also be eligible for this lower tax rate of 5% on income between Rs 2.5 lakh and Rs 5 lakh. Therefore, those in the higher tax slabs will pay lower tax by Rs 12500 per person. 

Individuals earning between Rs 50 lakh and Rs 1 crore will have to pay a surcharge of 10% on the total income tax payable by them. Currently there was no such surcharge on this category. Only those with income above Rs 1 crore were required to pay surcharge of 15% which continues. 

The tax an Indian pays every year is calculated on the basis of his/her gross total income. . The tax is calculated according to the income tax slabs announced by the government every year in the Budget. The annual union budget is normally announced in the month of February. 

Income tax slab rates for the financial year 2016-17 (assessment year 2017-18) are given below in the table: 

1. Normal tax rates applicable to a resident individual below the age of 60 years, non-resident individual, resident/non-resident HUF, AOP, BOI, artificial juridical person. 

2. Normal tax rates applicable to a resident individual of the age of 60 years or above at any time during the year but below the age of 80 years 

3. Normal tax rates applicable to a resident individual of the age of 80 years or above at any time during the year 

After taking the deductions under Section 80 (C) to 80 (U), the tax is payable after adding the cess and surcharge, if applicable. 

The education cess of 2% and secondary cess of 1% are calculated on the amount of tax payable separately. Both the cess are then added to the tax payable to arrive at the Gross tax payable amount. 

The surcharge is levied @ 15% on the amount of income tax where net income exceeds Rs 1 crore. In the case where the surcharge is levied, the cess will be levied on the tax amount plus surcharge. 

A resident individual can also avail rebate under Section 87(A) whose net income is equal to or less than Rs 5 lakh. The amount of rebate under this section is 100% of the income tax or Rs 5,000 whichever is less. It is deductible before calculating the cess. 

Source:-The Economic Times

Government employees need not file asset details under Lokpal for now

New Delhi: The Centre has extended indefinitely the deadline to file details of assets and liabilities by central government employees under a mandatory provision of Lokpal Act. A new format and fresh set of rules are being finalised by the government in this regard. The last date for filing such details was 31 December. 

“There is no requirement for filing of declarations of assets and liabilities by public servants now. The government is in the process of finalising a fresh set of rules. The said rules will be notified in due course to prescribe the form, manner and timelines for filing of declaration of assets and liabilities by the public servants under the revised provision of the said (Lokpal) Act. “All public servants will henceforth be required to file the declarations as may be prescribed by the fresh set of rules,” an order issued by Department of Personnel and Training (DoPT) said. 

There are about 50.68 lakh central government employees. As per rules, notified under the Lokpal Act, every public servant shall file declaration annually pertaining to his assets and liabilities as on 31 March every year or on or before 31 July of that year. 

For 2014, the last date for filing returns was 15 September. It was first extended till December, then till 30 April 2015 and third extension was up to 15 October. The date was again extended to 15 April 2016 and then 31 July for filing of the returns. The last date was further extended till 31 December after Parliament had passed a bill to amend the Lokpal and Lokayuktas Act, 2013. 

The declarations under the Lokpal law are in addition to similar ones filed by the employees under various services rules. The DoPT had last year also issued an order bringing NGOs receiving more than Rs one crore in government grants and donations above Rs10 lakh from abroad under the ambit of the Lokpal. The order had mandated filing of returns of the assets and liabilities by such organisations and their executives—director, manager, secretary or any other officer.

Source :  http://www.livemint.com/

Step-wise filing of ITR & all the links you need

It is time to start work on your income tax return. Although the last date to file for individuals is July 31, it helps to start early so that one is not rushed at the last minute. Here are all the links you need to help you e-file your tax return on your own and also a step by step guide on how to do it. 

The income tax department has provided an easy to use platform for users to pay taxes, file ITRs, cross-check TDS through TRACES, download forms, claim refunds, check status of dues, refunds, challans etc. However, a technically-challenged tax-payer may find it difficult to use these services. Below are quick links for: Registering for e-filing, viewing your form 26AS, Income tax calculator, e-payment of taxes, checking your dues, e-filing the income tax return (ITR), downloading ITR forms and other relevant forms, checking refund status, rectification of return, e-verification of return etc. 

Steps in filing your Income Tax Return 

1. Collect your TDS certificates, which have to be mandatorily in TRACES format, from all deductors. In case of digitally signed TDS certificates ensure that there is a check mark on the digital signature indicating it has been verified. Non-verified certificates will have a question mark over the digital signature. Cross check the TDS figure on the certificate with that shown as deducted from your income e.g. TDS figure on salary slip with the figure on the TDS certificate. Check whether deductor has deducted and deposited the tax with the government. TDS certificates are in Form 16 for salaried employees and Form 16A for other deductors. 

2. Download your tax credit statement (Form 26AS) from TRACES and cross-check the amount of tax deducted with that mentioned in TDS certificates. You should be getting certificates for all TDS reflecting in your Form26AS and all the TDS from your income should reflect in Form26AS. You need to log into your e-filing account on the income tax e-filing website to download your Form26AS. You can also download it via net-banking wherever the bank provides for this. 

Links to access Form 26AS:
https://incometaxindiaefiling.gov.in/e-Filing/UserLogin/LoginHome.html?nextPage=taxCred http://contents.tdscpc.gov.in/en/netbanking.html

3. In case of any difference in the TDS amount shown in Form 26AS and TDS certificates, take up the matter with the deductor (employer, or others, as the case may be) and request for rectification. 

4. Now compute your total income for the relevant financial year by adding income under all 5 heads and claiming all the relevant deductions, rebates and setting-off the current year and brought forward losses. Make sure that you don't miss any income in computing your total income is chargeable to tax. 

5. Compute your tax liability by applying the applicable tax rates in force for the financial year for which you are calculating the tax - FY2015-16 for most filers. 

Links for Tax Calculator 
Comprehensive calculator: http://incometaxindiaefiling.gov.in/ (Tax Calculator)
Simple calculator: http://economictimes.indiatimes.com/personal-finance/calculators/tax-impact-calculator

6. Next compute your final tax dues payable or refund of taxes. This is done by deducting the taxes that you have already paid for the year by way of - TDS, TCS, and Advance Tax from the tax liability computed above and adding interest payable under sections 234A, 234B, 234C, if any. Finally pay the final tax dues, if any. Tax can be paid physically via cheque or online using challan ITNS 280. Income tax payments made after 15th March of the financial year for which return is to be filed are cal .. 

Link to e-pay taxes:
https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp
Link to see your dues:
https://incometaxindiaefiling.gov.in/e-Filing/UserLogin/LoginHome.html?nextPage=taxDemand

7. Once you have paid your taxes, file the return. The deadline for filing individual tax returns ( except for those whose accounts are required to be audited as per section 44AB or those who are required to furnish the Transfer pricing report) is normally July 31 of the year immediately after the financial year for which the return is being filed. 

Link to e-file the return:
http://incometaxindiaefiling.gov.in/

8. To e-file the return, log in to income tax department's e-filing website with User ID, Password, Date of Birth and enter the Captcha Code. Once you login, you will see different tabs like "dashboard", "my Account" etc. 
http://incometaxindiaefiling.gov.in/ (Login)

9. In case of new user - Register yourself with income tax site first. You need to choose your status (individual, chartered accountant, tax deductor etc.) and fill in your basic details like address, DOB, PAN to get registered. Only then you can log in to e-filing.
http://incometaxindiaefiling.gov.in/ (Register yourself)

10. After signing in, choose the form applicable to you for the purpose of filing return.

Useful link
http://www.incometaxindia.gov.in/Pages/downloads/income-tax-return.aspx (and read instructions)

11. In case Form ITR-1 or ITR-4S is applicable to you, then you can simply file your return electronically without any need to download and upload the ITR forms.

Link to quick e-file ITR-1 and ITR-4S
https://incometaxindiaefiling.gov.in/e-Filing/UserLogin/LoginHome.html?nextPage=efileItr1

12. In case of other forms like ITR-2A, ITR-2, ITR-3 and ITR4, you need to download the relevant form from the website (either in excel utility or Java utility). 

Links for downloading the form
http://www.incometaxindia.gov.in/Pages/downloads/income-tax-return.aspx

13. Once you have downloaded the relevant form, you need to fill in your personal details, income details and other details required in the form. After filling the form completely, the same is to be uploaded to the website and the return will be filed. 

14. Filing of return (whether directly or after uploading the ITR-forms) is not valid without its verification. Return once filed has to be verified by the user. 

15. Verification of return can be done by any one of two modes i.e. e- verifications of ITR and Physical verification of ITR. 

E-verification can be done by: (i)) Making use of internet Banking, (ii) or by using the OTP sent on your mobile number after you have linked your aadhar with your account on the e-filing portal of the Income tax department or by generating the EVC. (iii) Another method for verification of your ITR is through bank account-based validation system if you don't have Aadhaar number or internet banking facility. (iv) Bank account-based validation 

On the other hand ITR can be verified physically as well. An acknowledgement or ITR-V is generated by the e-filing website immediately after you file/upload your return. To verify your return physically, you need to take a print-out of this acknowledgement, check and sign it and send it to the address mentioned on this acknowledgement. 

Link to e-verify the return
http://incometaxindiaefiling.gov.in/ (after signing in, go to "e-file" tab and click on "e verify") 

16. Once you have received the acknowledgement of your e-verification filing of your return is complete. You should receive an email confirming that your ITR-V has been received by the IT department i.e. your return stands e-verified. The email will be sent to the email you have registered in your e-filing account on the income tax department's e-filing website. 

Source : EconomicTimes

All the investments, expenditures you can claim as tax break under Section 80C

Most of us are already well aware of the deduction available under section 80C of the Income tax Act, 1961. The maximum amount of deduction that can be claimed under section 80C is Rs 150000 for FY2015-16. The section offers various investment options to the taxpayer which not only generate returns for him but can also be claimed as deduction while calculating total taxable income. 

Majority of people invest in life insurance policies, PPF, ELSS etc. in order to avail this deduction, but there are several other options too which are worth considering. Deduction under Section 80C is not only available for investments but also for specified expenditures made by the tax-payer. However, in order to claim the deduction for a particular financial year you need to invest/spend the deductible amount in that financial year. 

Here's a list of different investments and expenditures which can be claimed as deduction by the taxpayer under Section 80C. 

Provident Fund (PF) & Voluntary Provident Fund (VPF) 

A part of your salary is deducted monthly as your contribution towards PF. The total amount deducted annually can be claimed by you as deduction while computing your total (taxable) income. An employee can increase this contribution if he is willing to get a less take-home salary. This additional contribution is called VPF and is also eligible for deduction under Section 80C. The interest earned up to 9.5 per cent i .. 

So if you don't want to get into complications of choosing and buying the most appropriate investment option to avail tax benefits, then you can simply increase your VPF to make it equivalent to Rs 150000. 

Public Provident Fund (PPF) 

PPF is a scheme provided by the government and the investment in it is eligible for deduction under Section 80C. You can invest as low as Rs 500 and as high as Rs 150000 in a financial year. The current rate of interest is 8.10 per cent tax-free (compounded yearly) and the normal maturity period is 15 years. A point worth noting is that the interest rate is assured but not fixed. 

Life insurance Premiums 

Any amount that you pay towards life insurance premium for yourself, your spouse or your children can also be included in Section 80C deduction. Please note that the premium paid by you for your parents (father/ mother/ both) or your in-laws is not eligible for deduction under Section 80C. If you are paying premium for more than one insurance policy, all the premiums can be included. It is not necessary to have the insurance policy from Life Insurance Corporation (LIC), even insurance bought from private players (registered under Insurance Regulatory and Development Authority of India or IRDAI) can be considered here. 

Equity Linked Savings Scheme (ELSS) 

There are some mutual fund (MF) schemes specially created to offer you tax savings and these are called Equity Linked Savings Scheme (ELSS). The investments that you make in ELSS are eligible for deduction under Section 80C. This is one of the best ways to grow your money and enjoy tax benefit simultaneously as the return generated by ELSS is much more than those generated by other investment products. 

Home Loan Principal Repayment 

The Equated Monthly Installment (EMI) that you pay to repay your Home Loan consists of two components - Principal and Interest. The principal qualifies for deduction under Section 80C. Even the interest can save you significant income tax, but that would be under Section 24 and section 80EE of the Income Tax Act 

So if you have an outstanding home loan in your name, then the repayment of the principal amount made by you in a financial year can be claimed as deduction under Section 80C and you need not invest in other products specifically to avail tax benefits. 

Further, any payment made to development authorities like Delhi Development Authority (DDA) in order to purchase a house (which has been allotted to you in a scheme made in this regard) also qualifies as deduction under section 80C. 

Sukanya Samriddhi Account 

In this scheme, you can open an account on behalf of your minor daughter. Any amount deposited in this account would be eligible for deduction under Section 80C. Further, this account can be opened for a maximum of two girls and in case of twins this facility will be extended to the third child as well. 

The amount has to be deposited in this account for 15 years. The account will be mature after 21 years, which means that you don't have to deposit anything between the 16th and 21st year. 

The minimum annual deposit is Rs 1000, which can go up to Rs 150000. 

Interest rates on the deposit keep on changing every year. For FY2014-15 it was 9.1 per cent per annum, for FY2015-16 it was 9.2 per cent p.a. and for FY2016-17 it is 8.6 per cent p.a. The interest earned here is also tax-free. 

National Savings Certificate (NSC) (VIII Issue) 

NSC is a tax-saving instrument with a maturity period of five years. A person can purchase an NSC for as low as Rs 100. Any investments in NSC are eligible for deduction under Section 80C. At present, the interest rate is 8.10 per cent p.a. This interest is compounded half yearly and is taxable. However, this being a cumulative scheme (i.e., interest is not paid to the investor but instead accumulates in the account), each year's interest is considered reinvested in the NSC. Since it is deemed reinvested, it qualifies for a fresh deduction under Section 80C, thereby making it tax-free. Only the final year's interest, when the NSC matures, does not receive a tax deduction as it does not get reinvested, but is paid back to the investor along with the interest of the previous years and the capital amount. 

So in a nutshell, the interest earned every year, except the last one, is tax-free. 

Infrastructure Bonds 

Also popularly called Infra Bonds, these are issued by infrastructure companies, not the government. The amount invested in these Bonds can also be included in Section 80C deduction. 

Five-year Bank Fixed Deposits (FDs) 

Any term deposit with a tenure of at least five years with a scheduled bank also qualifies for deduction under section 80C and the interest earned on it is taxable. 

Senior Citizen Savings Scheme 2004 (SCSS) 

This scheme, as the name suggests, is meant only for senior citizens. 

Any individual in the 60 or above age group can open an account under this scheme. An individual above 55 but less than 60, and having retired under a Voluntary Retirement Scheme or a Special Voluntary Retirement Scheme, can also open an account under this scheme, but such an account must be opened within three months of the retirement date. 

If you are retired defence personnel, then you can open this account without any age limit, provided you fulfill other specified conditions. 

Any investment in this account would be eligible as deduction under Section 80C. The current annual rate of interest offered under this scheme is 8.6 per cent payable quarterly. Please note that the interest is payable quarterly instead of compounded quarterly. Thus, unclaimed interest on these deposits won't earn any further interest and also the interest earned is chargeable to tax. 

Five-year Post Office Time Deposit (POTD) Scheme 

POTDs are similar to bank fixed deposits. They are available for different time durations like one, two, three and five years but only five-year POT qualifies for tax-saving under section 80C. The interest rates offered by them is compounded quarterly, but paid annually. 

Please note that the interest earned is entirely taxable. 

NABARD Rural Bonds 

The NABARD Rural Bonds issued by NABARD (National Bank for Agriculture and Rural Development) also qualify for deduction under section 80C. These bonds are tax-free and also offer decent interest rates. 

Unit linked Insurance Plan (Ulip) 

An insurance product which covers life insurance and also provides the benefits of equity investments, Ulips have attracted the attention of investors and tax-savers because of their multiple advantages -life cover, tax-saving and also helping you grow your money by giving decent returns in the long-term. 

Payment of Tuition Fees 

Paying your kids' school fees is an expenditure which can't be ignored. Now imagine that the amount paid by you as tuition fees (excluding development fee of donation amount), whether at the time of admission or thereafter, is eligible as deduction to you and will help you save tax. 

Please note that the fees should be paid to a school, college, or university in India only.

Source : EconomicTimes